California Olive Ranch: Defying Tradition

Summary

California Olive Ranch (COR) has devel­oped a busi­ness model that com­bines Italian and Spanish mill tech­niques to pro­duce high-qual­ity olive oil on a large scale, focus­ing on effi­ciency and qual­ity through con­tin­u­ous exper­i­men­ta­tion and inno­va­tion. By pri­or­i­tiz­ing qual­ity over quan­tity and uti­liz­ing data-dri­ven deci­sion-mak­ing, COR has achieved suc­cess in the American olive oil mar­ket and aims to increase over­all con­sump­tion through edu­ca­tion and pub­lic rela­tions out­reach.

Since embark­ing on a mis­sion to bring large-scale olive oil pro­duc­tion to California in 1998, California Olive Ranch (COR) has honed its oper­a­tions to repli­cate what CEO Gregg Kelley and his asso­ciate Jim Lipman, VP of pro­duc­tion oper­a­tions call the ​“model of an Italian mill using the equip­ment of a Spanish mill.” Simply put, California Olive Ranch’s cur­rent busi­ness model aims to pro­duce high-qual­ity olive oil while uti­liz­ing mass pro­duc­tion means.

The meth­ods that COR employs are designed to sub­vert the ​“tra­di­tion” that Kelley blames for the short­com­ings in the olive oil indus­try.

From test­ing new hedg­ing meth­ods on the olive trees that pop­u­late their groves to fine-tun­ing their milling process, the com­pany con­stantly seeks new ways to max­i­mize effi­ciency and qual­ity.

By track­ing each batch of oil from its growth on the tree to the moment it’s bot­tled, the effi­cacy of each ini­tia­tive is uniquely mea­sur­able.

In farm­ing, results related to qual­ity are held in the same esteem as those related to quan­tity. Kelley explained that he would rather have a con­sis­tent, healthy crop every year rather than a robust one fol­lowed by a weaker crop the next: prun­ing and hedg­ing meth­ods are closely ana­lyzed to achieve this goal.

With its advance­ments, Kelley noted that COR prac­tices ​“agri­cul­tural learn­ing” and that each exper­i­ment is a gam­ble of sorts. The com­pa­ny’s use of data allows ​“informed bets” on each new crop.

Often those bets pay off: COR won three Gold and two Silver Awards at the 2017 New York International Olive Oil Competition.

Harvests are con­ducted with a mechan­i­cal har­vester, one that the com­pany devel­oped with the help of the Oxbo in 2008 that has since become an indus­try stan­dard, accord­ing to Kelley.

The inno­va­tions don’t stop once the olives have been plucked from their trees. COR is explor­ing a vari­ety of efforts aimed to pro­duce a bet­ter qual­ity prod­uct on a large scale, both within their own Chico-based mill and beyond.

The com­pany recently announced part­ner­ships with South American-based pro­duc­ers, par­tic­u­larly in Argentina, where COR has sent staff mem­bers to assist with agri­cul­tural and export leg­is­la­tion mat­ters.

As the fast-grow­ing com­pany strives to accom­mo­date con­sumer palates, each blend is not only reviewed by a sen­sory panel for qual­ity, it also under­goes a stan­dard­iza­tion because, as Lipman put it, ​“Cheerios should always taste like Cheerios.”

Kelley and his team of cer­ti­fied testers, includ­ing Mary Morin and Logan Jennings of the Argentina team, assert that as con­sumers con­tinue to become more acquainted with high-qual­ity olive oil, their tastes will con­tinue to change. Kelley noted that ​“demand is insa­tiable” at this point, as con­sumers are just begin­ning to awaken to the pos­si­bil­i­ties.

Rather than look­ing to export the fruits of their labors to for­eign mar­kets, Kelley explained that COR’s pri­mary poten­tial still lies within the United States. Between the com­pa­ny’s two brands, California Olive Ranch and Lucini, COR’s mar­ket share accounts for around eight per­cent of American olive oil sales.

Rather than grow­ing their mar­ket share rel­a­tive to com­peti­tors, Kelley said he hopes to ​“grow the pie” by increas­ing over­all American olive oil con­sump­tion through edu­ca­tion. He called pub­lic rela­tions out­reach the com­pa­ny’s ​“great­est tool” to extoll its val­ues in a way that dis­sem­i­nates the nec­es­sary tech­ni­cal infor­ma­tion while appeal­ing to con­sumers’ emo­tions.

Though COR’s unique mis­sion does­n’t quite match that of any of its com­peti­tors in the indus­try, Kelley said its suc­cess could spell prof­its for every com­pany oper­at­ing with the equa­tion.

He pointed out that California Olive Ranch-branded prod­ucts cur­rently sell at a 50 per­cent price pre­mium rel­a­tive to the cat­e­gory — Lucini at a 180 per­cent pre­mium.

Traditionally, power and prof­its belonged to a select few bot­tlers and investors. In Kelley’s ideal world the power is handed back to grow­ers and pro­duc­ers, which he said can be achieved if pro­duc­ers have a voice. As Kelley goes on to claim, COR’s suc­cess is ​“proof that it can be done.”